The Commerce Department reported Tuesday that retail sales increased in each month of the last quarter (although the October and November gains were not as strong as reported earlier). Vehicle demand lifted the top-line number, but even outside of car dealerships, sales looked solid. Economists at Credit Suisse estimate real consumer spending grew at a 3.6% annual rate, “on track for the best quarterly performance in three years.”

Even with consumers out spending, the retail sector as a whole is holding more inventory. In November, retail stockpiles rose a large 0.8%, and the October levels were revised higher. The inventory-sales ratio (the amount of months it would take to sell out all inventory) held at 1.43 and has been trending higher since early 2012. Although the ratio has come down from its lofty recession levels, the uptrend could signal retailers had too much merchandise on hand at the end of 2013. That would mean less ordering of new goods in 2014.

The most troublesome buildup has been in general merchandise stores, including department stores. That inventory-sales ratio has increased from 1.44 in November 2012 to 1.51 in November 2013. And with sales at these stores up only 0.1% in December, it is unlikely their inventories were drawn down last month.

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